John Fredriksen’s SFL Corporation has acquired a newbuild 308,000 dwt VLCC from China’s Landbridge Group, and bareboat chartered it back for a period of seven years.
SFL is paying $65m for the vessel, and the seven-year bareboat charter is worth nearly $60m, and includes a purchase obligation at the end of the seven years. Landbridge also has buy back options through the charter after three years.
Landbridge has already secured a three-year sub charter to an oil major.
SFL said it will find the acquisition with a $50m bank debt facility, and net cash flow after debt service during the first three years is estimated to be more than $4m per year.
Ole Hjertaker, CEO of SFL Management, commented: “Amidst the recent market volatility, we see attractive investment opportunities in our core markets. Some of the best investments can be made when the general market is less competitive, and staying focused and able to execute on accretive growth opportunities through the market cycles is a key differentiating factor.
With a versatile toolbox, including time charters, bareboat charters and senior financing structures, SFL can provide prospective customers with competitive tailor made solutions, whilst at the same time creating shareholder value on the back of our strong balance sheet and our unique access to attractively priced capital.”